Trial opens over leases for cabins at Kokee Park

LIHUE » In 1975, Frank Hay bought a small cabin in Kokee State Park, near Kauai's Waimea Canyon, for $16,500.

It is a one-bedroom, only about 600 square feet, he said. But the location, in the inland woods of the Garden Isle, is breathtakingly scenic.

Now, he testified in Circuit Court yesterday, despite 30 years of paying taxes on the cabin, paying rent to the state for the land, and maintaining the small structure, the state believes his "historically significant" vacation home belongs to it.

A two-day trial began yesterday on the allegation by Hay and 40 other leaseholders that their constitutional rights are being violated because the state is taking the cabins without compensation. A decision is expected by the end of the year.

But the state contends the owners forfeit the cabins when the leases expire.

There is no doubt that the land under the cabins is owned by the state. The leaseholders have paid rent to the state and, before it, the territory and kingdom of Hawaii for as long as the cabins have been there, which, in some cases, stretches back to the 1800s.

But the leaseholders say they have paid thousands of dollars buying the historic cabins and then restoring and maintaining them. Hay said he believes that Kokee is already a historic preservation district and that the state should negotiate directly with owners of the cabins deemed historically significant.

The state, however, says it owns the cabins.

From 1965 the cabin owners negotiated directly with the state for the leases, and the lease called for the leaseholder to keep the cabin. But in 1985 the procedure changed, and the state sent the leases out to auction with so-called surrender clauses.

The clause -- contained in every Kokee lease -- says specifically that at the end of the lease, the leaseholder "will peaceably deliver possession of the premises, together with improvements, unless provided otherwise."

This, argued Deputy Attorney General William Wynhoff, provides enough warning that when the leases were set to expire at the end of 2005, the cabins reverted to the state.

The DLNR was set to put the cabin leases up for public auction earlier this year, but that plan is on hold until the trial and any appeals are decided.

Leaseholder and former Kauai attorney Sam Blair testified yesterday he bought a house seven years ago for $15,000 and then spent an additional $10,000 to fix it up.

"The place was a mess," with 15 years of mold and mildew, Blair said. However, "the setting was spectacular."

Still, had he known that seven years later his investment would be worthless, Blair said he would not have touched it.

While the "surrender clause" was troubling, he said, it conflicted with another portion of the lease that said the state owned everything on the land except for the recreation cabins. So he signed it.

"The last thing I wanted was a lawsuit," Blair added. "I wanted to make sure I wasn't buying into some big beef."